My Generation: Risk, Security and Savings

By Sarah Bennett-Astesano


As American families have seen their real wages decrease and their disposable income shrink, risk – and the need to save money to protect themselves from it – has grown.






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    • Since the 1970s, the risk of involuntary job loss has gone up by 150 percent, according to Elizabeth Warren and Amelia Warren Tyagi, authors of The Two-Income Trap and All Your Worth. The risk that a wage-earner will lack health insurance has grown by 40 percent.

    At the same time, security for workers’ retirement has decreased. “Over the past 20 to 30 years, the burden of paying for retirement has been shifted from the employer – in the form of traditional pensions – to the employee – in the form of 401(k)s, 403(b)s, etc.,” says Robert Brokamp, editor of Rule Your Retirement newsletter, a product of The Motley Fool financial education firm.

    Anyone who pays even occasional attention to the news knows that Social Security is less and less of a good bet. “And traditional pensions are being offered by fewer and fewer companies, which means families have to choose to save, and learn how to invest that money,” Brokamp says. “Now, employees have to choose an amount, choose investments, and they have no idea how long the money will last. And, of course, with longer life expectancies, that money has to last much longer.”

    This generation of retirees and near-retirees has already felt the squeeze – a squeeze that has had a direct effect on this generation of young parents.

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